Many natural resources and goods undergo numerous trading transactions from the initial harvesting, manufacturing, etc. stage until the time such goods or commodities are integrated into a final product. Many of these goods or commodities are unique within themselves, and thus carry an identity throughout the trading process. Cotton is one such commodity which, when compressed into a bale, has a certain quality, weight, etc. such that it maintains an individual identity throughout the trading process, until woven into a fabric, or otherwise used by the textile industry. A warehouse receipt is initially associated with each bale, which receipt is evidence of title to the goods throughout the various trading transactions. Other types of goods such as grain, are similarly represented by warehouse receipts, or other evidences of title. As other examples, many types of personal property, such as automobiles, are bought and sold using a documentary type of title.
The documentary form of title is one of the oldest and most well known types of title systems. The problems involved in buying, selling or otherwise trading such titled goods are apparent. For example, the documentary form of title is usually guarded by storing it in a safe place. When dealing in large quantities of such goods, the space required can be substantial. In addition, in the actual trading transaction, the title documents must be physically exchanged between the buyer and seller, which exchange generally involves mailing the documents from the seller to the buyer. In such transactions, it is obvious that the documents themselves can be lost, damaged or stolen. Importantly, and especially with the warehouse type of receipts, such documents are bearer documents in which the holder, even a wrongful holder, can sell the goods, or carry out a trading transaction involving the goods. Other disadvantages of the document title system are apparent, in that the documents themselves can be wrongfully modified or changed, can be forged, or illegal title documents can be generated.
From the foregoing, it can be seen that a need exists for an improved title system which overcomes the foregoing problems. A further need exists for a title system which is electronic in nature, and which is easily implementable with other computerized trading systems. Yet another need exists for a system which can accommodate electronic titling, as well as the documentary form of title.